Overcoming the Orthodoxy with Scott Fullwiler
Trump keeps telling us that unemployment is at an all-time low. Even if that were true, it wouldn’t stay that way. As our guest Scott Fullwiler explains, the private sector isn’t about creating jobs; it’s about profitability. So even if there were enough jobs for everybody who wants one, it would be a coincidence. And how can we design an economic policy around a coincidence?
In this special interview with host Steve Grumbine, Fullwiler says that we have a choice whether to have a buffer stock of the involuntarily unemployed or a buffer stock of the employed. He says that this is one of the revelations in Randall Wray’s seminal 1998 book, Understanding Modern Money: The Key to Full Employment and Price Stability. Another revolutionary concept was that the central bank is about interest rates, not the money supply, while government deficits are about money, not interest rates.
In a wide ranging conversation, Grumbine and Fullwiler revisit some of the key moments in MMT history -- what Fullwiler calls the “hockey stick moments” -- including Dr. Stephanie Kelton’s position as Chief Economist on the Senate Budget Committee, and Alexandria Ocasio Cortez’s public utterance of the phrase “Modern Monetary Theory.” As we all remember, after this was reported it was referred to in one article after another, carrying MMT, in name at least, into the public square.
Grumbine brings up the ongoing conflict between supporters of the Federal Job Guarantee and a Universal Basic Income. Fullwiler insists the two are not in competition. And because the UBI doesn’t have a solution for the guy who still wants to work but doesn’t have a job, we’re back at square one, with the choice of having an unemployed buffer stock or an employed buffer stock.
Professor Scott Fullwiler is in UMKC’s interdisciplinary program and a Research Scholar at the Global Institute for Sustainable Prosperity
Follow him on Twitter @stf18
https://ftalphaville.ft.com/2019/03/01/1551434402000/An-MMT-response-on-what-causes-inflation/
http://www.global-isp.org/scott-fullwiler/
